PART I. FINANCIAL INFORMATION [Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited consolidated financial statements for Q2 2020 reflect a significant turnaround to **$14.4 million** net income, largely due to a **$9.5 million** social insurance liability reversal, alongside decreased assets and operating cash flow [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $58,832 | $74,302 | | Total current assets | $350,950 | $378,752 | | Total assets | $526,420 | $564,159 | | **Liabilities & Equity** | | | | Total current liabilities | $222,249 | $266,456 | | Total liabilities | $240,288 | $289,760 | | Total stockholders' equity | $286,132 | $274,399 | - Total assets decreased from **$564.2 million** at the end of 2019 to **$526.4 million** as of June 30, 2020, primarily due to a reduction in cash and cash equivalents, inventories, and contract assets[8](index=8&type=chunk) - Total liabilities decreased from **$289.8 million** to **$240.3 million**, mainly driven by a significant reduction in accrued compensation and accounts payable[8](index=8&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Quarterly Operating Results (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Net sales | $153,133 | $193,896 | | Gross profit | $38,075 | $33,993 | | Operating income (loss) | $6,460 | $(3,926) | | Accrued social insurance adjustment | $9,464 | $— | | Net income (loss) | $14,400 | $(5,061) | | Diluted EPS | $1.02 | $(0.37) | - Net sales for Q2 2020 decreased by **21.0%** year-over-year to **$153.1 million**[11](index=11&type=chunk) - The company reported a net income of **$14.4 million** in Q2 2020, a significant improvement from a net loss of **$5.1 million** in Q2 2019, primarily due to a **$9.5 million** gain from an accrued social insurance adjustment[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash from operating activities | $4,487 | $20,233 | | Net cash used for investing activities | $(9,787) | $(11,353) | | Net cash used for financing activities | $(4,496) | $(12,155) | | Effect of exchange rate changes | $(5,674) | $(367) | | **Net decrease in cash** | **$(15,470)** | **$(3,642)** | - Net cash provided by operating activities decreased significantly to **$4.5 million** in the first six months of 2020 from **$20.2 million** in the same period of 2019, mainly due to changes in accounts payable and accrued liabilities[21](index=21&type=chunk) - Cash and cash equivalents decreased by **$15.5 million** during the first six months of 2020, ending the period at **$58.8 million**[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail the impact of COVID-19, significant customer concentration, a **$9.5 million** social insurance liability reversal, ongoing litigation, and performance-based warrants - Comcast Corporation was a major customer, accounting for **19.3%** of net sales in Q2 2020 and **20.5%** in the first six months of 2020; Daikin Industries Ltd. also became a major customer, representing **10.7%** of net sales in Q2 2020[38](index=38&type=chunk) - In June 2020, the company reversed an accrued social insurance liability of approximately **$9.5 million** related to its previously sold Guangzhou entity, as the two-year indemnification period expired[70](index=70&type=chunk)[132](index=132&type=chunk) - The company is involved in multiple legal proceedings with Roku, Inc., including a patent infringement lawsuit and an ITC investigation; the company also settled a dispute with Ruwido in May 2020[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Performance-based warrants issued to Comcast are contingent on purchase levels; for the period ending Dec 31, 2019, Comcast vested in **100,000** warrants out of a potential **250,000**[93](index=93&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2020 sales decline due to COVID-19, improved gross margin, and liquidity management [COVID-19 Impact](index=29&type=section&id=COVID-19%20Impact) - The COVID-19 pandemic has caused a global economic slowdown, and its impact on the company's operations and financial performance remains uncertain[116](index=116&type=chunk) - The company experienced temporary factory closures in China (two weeks in Q1) and Mexico (over one week in Q2) due to government mandates, implementing safety measures like temperature scans, masks, and social distancing[117](index=117&type=chunk) - Management anticipates a negative impact on sales demand for Q3 and possibly the rest of 2020 due to the pandemic, with observed supply chain disruptions[119](index=119&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Comparison of Three Months Ended June 30, 2020 and 2019 (in millions) | Metric | Q2 2020 | Q2 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $153.1 | $193.9 | -21.0% | | Gross Profit | $38.1 | $34.0 | +12.1% | | Gross Margin | 24.9% | 17.5% | +7.4 pts | | Operating Income (Loss) | $6.5 | $(3.9) | N/A | - The **21.0%** decrease in Q2 net sales was primarily attributed to the COVID-19 pandemic's adverse effect on demand and the supply chain[126](index=126&type=chunk) - Gross margin increased to **24.9%** in Q2 2020 from **17.5%** in Q2 2019, driven by lower U.S. tariff expenses, improved operational efficiencies in the Mexico facility, higher royalty revenue, and favorable currency exchange rates[127](index=127&type=chunk) - A **$9.5 million** reversal of an accrued social insurance liability related to a previously sold Guangzhou entity significantly boosted income[132](index=132&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash from operating activities for the first six months of 2020 was **$4.5 million**, a sharp decrease from **$20.2 million** in the same period of 2019[143](index=143&type=chunk) - As of June 30, 2020, the company had **$58.8 million** in cash and cash equivalents and **$49.3 million** available for borrowing under its **$125.0 million** credit line[151](index=151&type=chunk)[157](index=157&type=chunk) - The company suspended its share repurchase program (2020 Plan) due to uncertainties surrounding the COVID-19 pandemic[84](index=84&type=chunk)[147](index=147&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate and foreign currency fluctuations, with a **10%** adverse FX movement potentially impacting Q3 net income by **$6.4 million** - The company is exposed to interest rate risk on its credit line; a **100 basis point** increase in interest rates would impact annual net income by approximately **$0.5 million** based on the June 30, 2020 outstanding balance[163](index=163&type=chunk) - Significant foreign currency exchange rate risk exists, particularly with the Chinese Yuan Renminbi (CNY), as most products are manufactured in China; a stronger CNY increases manufacturing costs[165](index=165&type=chunk) - A sensitivity analysis indicates that a **10%** adverse fluctuation in the exchange rates of key currencies (CNY, MXN, GBP, EUR, etc.) against the U.S. Dollar would cause a fluctuation of approximately **$6.4 million** in net income for the third quarter of 2020[168](index=168&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the principal executive and financial officers concluded that the company's disclosure controls and procedures were effective[170](index=170&type=chunk) - There were no changes in internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[171](index=171&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings typical for its industry, with specific details referenced from Note 11 of the financial statements - The company is involved in various lawsuits typical for its industry, including claims related to patent infringement and product liability[82](index=82&type=chunk)[172](index=172&type=chunk) - For detailed information on specific litigation, the report refers to Note 11 in the Notes to Consolidated Financial Statements, which covers matters with Ruwido (settled) and Roku (ongoing)[172](index=172&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The ongoing COVID-19 pandemic is highlighted as a significant risk factor, potentially impacting demand, supply chains, and overall financial condition - The COVID-19 pandemic is a significant risk factor, impacting global economic activity, consumer confidence, and business spending, which may reduce sales and margins[174](index=174&type=chunk)[177](index=177&type=chunk) - The pandemic poses risks of disruptions in manufacturing operations and the supply chain, particularly from geographic areas impacted by containment measures[177](index=177&type=chunk) - The ultimate impact of COVID-19 is uncertain and depends on future developments, including the duration of the pandemic and its effect on the global economy[177](index=177&type=chunk) [Share Repurchases and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **3,107** shares in Q2 2020 for employee tax obligations, but suspended its 2020 repurchase plan due to COVID-19 uncertainties Share Repurchases for Q2 2020 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2020 | — | $— | | May 2020 | 3,107 | $36.87 | | June 2020 | — | $— | | **Total** | **3,107** | **$36.87** | - On March 10, 2020, the Board approved a new plan authorizing the repurchase of up to **300,000** shares (the "2020 Plan"); as of June 30, 2020, **175,127** shares remained available for repurchase under this plan[178](index=178&type=chunk) - The company has suspended share repurchasing under its 2020 Plan due to uncertainties surrounding the COVID-19 pandemic, but may resume when conditions warrant[178](index=178&type=chunk)

15th Annual Needham Virtual Technology & Media Conference May 20, 2020 NASDAQ GS: UEIC Safe Harbor Statement This presentation contains "forward-looking statements" within the meaning of federal securities laws, including net sales, profit margin and earnings trends, estimates and assumptions; our expectations about new product introductions; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of ...

Financial Data and Key Metrics Changes - Net sales for Q1 2020 were $152 million, down from $182.7 million in Q1 2019, primarily due to opting out of low-margin business and COVID-19 impacts [16][17] - Gross profit reached $47 million, representing a gross margin of 30.9%, an increase from 25.8% in the prior year, driven by royalties and a stronger U.S. dollar [18] - Operating income increased to $15 million, up from $14.6 million in Q1 2019, with an operating margin of 9.8% compared to 8% in the prior year [20] - Net income was $11.5 million or $0.81 per diluted share, compared to $11.3 million or $0.82 per diluted share in the prior year [21] Business Line Data and Key Metrics Changes - The company has shifted focus towards software-intensive technologies and licensing, which carry higher margins, despite lower overall sales [14] - R&D expenses increased to $7.7 million from $6.6 million, reflecting ongoing investment in technology and product development [19] Market Data and Key Metrics Changes - Customer demand was impacted by the closure of consumer electronics retail outlets and limitations on professional installations due to COVID-19 [9][10] - Subscription broadcast customers experienced reduced operations, affecting demand for products requiring installation [9][10] Company Strategy and Development Direction - The company aims to enhance its product mix by moving away from lower-margin products towards more advanced and differentiated solutions [14] - Continued investment in technology and product development is expected to yield competitive advantages and support long-term growth [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the current challenges are temporary and that demand for home entertainment remains strong [13][49] - The company anticipates second quarter net sales to range from $150 million to $160 million, down from $193.4 million in Q2 2019, but expects profitability to improve [26][27] Other Important Information - Cash and cash equivalents decreased to $58.9 million from $74.3 million at the end of 2019, primarily due to timing of accounts payable [22] - The company repurchased 169,000 shares for $6.3 million during the first quarter [23] Q&A Session Summary Question: Context around Q2 revenue guidance - Management indicated that the lower demand is primarily due to customers relying on truck rolls and the shift away from lower-margin products [35][39] Question: Volume or significance of new programs ramping in the back half of the year - Management confirmed ongoing projects with no significant delays, with engineers actively engaged with customers [41][42] Question: Customer concentration for the quarter - Comcast represented 21.7% of revenue, being the only customer above 10% concentration [44] Question: Impact of consumer channels being closed - Management noted that the majority of business is through subscription broadcasting, but consumer channel closures have also contributed to demand declines [46][47] Question: Demand recovery in subscription broadcast - Management expects demand to recover as consumers become more comfortable with installers entering their homes [49][50] Question: Revenue percentage from chip or license-based sales - While specific percentages were not disclosed, management indicated that royalties have been growing nicely [53] Question: Lower demand due to cord-cutting - Management clarified that the primary cause of lower demand is related to installation delays rather than cord-cutting [55][57] Question: Stronger demand for self-install products - Management confirmed increased interest in self-install products, which are easier for both consumers and installers [60] Question: Products affected by retail closures - Management indicated that while TVs were not significantly impacted, other consumer products saw lower demand due to retail closures [61]

Financial Performance - Total net sales for the three months ended March 31, 2020, were $151.778 million, a decrease of 17.5% compared to $184.163 million for the same period in 2019[34]. - Net sales in the United States were $74.381 million, down 25.0% from $98.936 million in the prior year[36]. - Net sales decreased 17.6% to $151.8 million for the three months ended March 31, 2020, compared to $184.2 million for the same period in 2019[116]. - Revenue from goods and services transferred at a point in time was $117.058 million, down from $136.338 million year-over-year, representing a decline of 14.1%[34]. - Gross profit for the three months ended March 31, 2020, was $42.9 million, with a gross profit margin of 28.3%, up from 21.7% in the same period in 2019[129]. - Operating income increased to $8.0 million for the three months ended March 31, 2020, up from $1.7 million for the same period in 2019, with an operating income percentage of 5.3% compared to 0.9%[122]. - Basic earnings per share for the three months ended March 31, 2020, was $0.42, compared to a loss of $0.07 for the same period in 2019[105]. - Diluted earnings per share for the three months ended March 31, 2020, was $0.41, compared to a loss of $0.07 for the same period in 2019[105]. - The net gain on foreign currency exchange contracts was $0.3 million for the three months ended March 31, 2020, compared to a net loss of $0.3 million for the same period in 2019[108]. Cash and Liquidity - Cash and cash equivalents totaled $58.927 million as of March 31, 2020, a decrease from $74.302 million at December 31, 2019[33]. - Net cash used by operating activities was $8.3 million during the three months ended March 31, 2020, compared to $4.5 million in the same period in 2019[136]. - Net cash provided by financing activities was $0.6 million during the three months ended March 31, 2020, compared to a net cash used of $0.5 million in the same period in 2019[138]. - As of March 31, 2020, the outstanding balance on the Credit Line was $78.0 million, with $44.3 million available for borrowing[149]. - The company had a $125 million revolving line of credit, with $78 million outstanding as of March 31, 2020, and an interest rate of 2.20%[54][57]. Assets and Liabilities - Accounts receivable, net, were $137.094 million as of March 31, 2020, compared to $139.198 million at December 31, 2019[38]. - The allowance for bad debts increased to $1.681 million at the end of the first quarter of 2020, up from $1.492 million at the end of 2019[39]. - Inventory as of March 31, 2020, was $142.243 million, slightly down from $145.135 million at December 31, 2019[42]. - Total long-lived tangible assets amounted to $103.663 million, a decrease from $110.558 million as of December 31, 2019, representing a decline of approximately 6.4%[88]. - Total lease liabilities as of March 31, 2020, amounted to $19.099 million, with total lease payments projected at $21.707 million[48]. - Operating lease liabilities totaled $19,099 thousand as of March 31, 2020, down from $20,542 thousand at December 31, 2019[47]. Expenses - Operating lease expense for the three months ended March 31, 2020, was $1.388 million, down from $1.976 million in the same period of 2019[47]. - Research and development expenses increased by 16.3% to $7.9 million for the three months ended March 31, 2020, from $6.8 million in the same period in 2019[131]. - Selling, general and administrative expenses decreased to $27.0 million for the three months ended March 31, 2020, down from $31.4 million in the same period in 2019[132]. - Stock-based compensation expense for the three months ended March 31, 2020, totaled $2.303 million, an increase of 20% compared to $1.918 million for the same period in 2019[89]. Impact of COVID-19 - The COVID-19 pandemic is expected to negatively impact sales demand for the second quarter and possibly the remainder of 2020[121]. - The impact of the COVID-19 pandemic on the company's business remains uncertain, with potential risks to revenue and operations highlighted[152]. - Local government mandates required the closure of China factories for approximately two weeks beyond the end of the Chinese Lunar New Year[119]. - The company is evaluating the impact of recent legislation related to COVID-19 on its financial position and operations[65]. Share Repurchase and Stock Options - The company repurchased 169,000 shares of common stock at a cost of $6.291 million during the three months ended March 31, 2020, compared to 43,000 shares at a cost of $1.215 million in the same period of 2019[86]. - The company has 854,000 stock options outstanding as of March 31, 2020, with a weighted-average exercise price of $42.29 and an aggregate intrinsic value of $4.070 million[90]. - The weighted average fair value of stock option grants for the three months ended March 31, 2020, was $17.70, up from $10.28 in 2019, indicating a significant increase of 72.5%[92]. - The company has suspended share repurchases under the 2020 Plan due to uncertainties surrounding the COVID-19 pandemic, with 175,127 shares remaining authorized for repurchase[85]. Legal Matters - The company has filed a complaint with the International Trade Commission against Roku, TCL, Hisense, and Funai, seeking a permanent exclusion order for infringing products[81]. - The company is involved in multiple ongoing litigations, including a significant case against Roku, which may impact future operations and financial performance[82].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________________ FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...

Universal Electronics, Inc. (NASDAQ:UEIC) Q4 2019 Earnings Conference Call February 20, 2020 4:30 PM ET Company Participants Kirsten Chapman - LHA Investor Relations Paul Arling - Chairman & CEO Bryan Hackworth - CFO & SVP Conference Call Participants Jeffrey Van Sinderen - B. Riley FBR, Inc. Steven Frankel - Dougherty & Company Gregory Burns - Sidoti & Company Operator Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Year-End 2019 Universal Electronics Inc. Earnings Co ...

Investor Presentation 22nd Annual Needham Growth Conference NASDAQ GS: UEIC Safe Harbor Statement During this presentation, Management will reference Adjusted Non-GAAP information, including Adjusted Non-GAAP net sales, Adjusted Non-GAAP gross profit, Adjusted Non-GAAP net income, and Adjusted Non-GAAP diluted earnings per share. References to Adjusted Non-GAAP information are to non-GAAP measures. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP meas ...

Universal Electronics Inc. (NASDAQ:UEIC) Q3 2019 Earnings Conference Call November 7, 2019 4:30 PM ET Company Participants Kirsten Chapman - Investor Relations, LHA Paul Arling - Chairman & Chief Executive Officer Bryan Hackworth - Chief Financial Officer Conference Call Participants Steven Frankel - Dougherty Jeff Van Sinderen – B. Riley Greg Burns - Sidoti & Company Jeff Feinberg - Feinberg Investments Operator Ladies and gentlemen, thank you for standing by and welcome to the Universal Electronics' Third ...

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-21044 _______________________________________ UNIVERSAL ELECTRONICS INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________________ FORM 10-Q _______________________ ...

Investor Presentation Q2 2019 NASDAQ GS: UEIC Safe Harbor Statement During this presentation, Management will reference Adjusted Non-GAAP information, including Adjusted Non-GAAP net sales, Adjusted Non-GAAP gross profit, Adjusted Non-GAAP net income, and Adjusted Non-GAAP diluted earnings per share. References to Adjusted Non-GAAP information are to non-GAAP measures. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. ...